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Study: Hillsborough, Pinellas could raise Rays stadium funds

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Published:   |   Updated: March 14, 2013 at 01:38 AM
TAMPA -

The Tampa region can afford a new baseball stadium for the Tampa Bay Rays — no matter which side of the bay it sits on, a business group studying the issue has found.

A new stadium would probably need $350 million in public money, plus $150 million or so more Rays might pitch in, said the region’s Baseball Stadium Financing Caucus.

The group leaves unresolved big questions, however, including how much the public is willing to sacrifice to get a stadium.

Two financing options, for example, would be a new car-rental tax at Tampa International Airport and adding another fee onto hotel visitors. Both ideas would require approval from the state Legislature and might provoke a fight among local tourism leaders leery of making the area more expensive for visitors.

Tampa Mayor Bob Buckhorn, who wasn’t part of the caucus, on Monday said he was encouraged the group found that a new Rays ballpark is feasible, even if the public’s share of the costs for a new stadium isn’t completely known.

"Some of that will be dependent on how much the Rays put in," Buckhorn said. "But I think the community’s been waiting for this.

"I think the ball is in St. Petersburg’s court right now, St. Pete and the Rays. They’ve got to resolve some challenges. Keeping one’s head in the sand is not an option."

The Tampa and St. Petersburg chambers of commerce formed the stadium financing caucus to research how to pay for a new Rays stadium, but they haven’t touched where to put one.

That probably would be the most controversial element to any new stadium plan because taxpayers in Pinellas are unlikely to want to pay for a stadium in Hillsborough, and vice versa.

So, location aside, the caucus issued parallel financing schemes showing how each county individually could pay for a ballpark. The caucus doesn’t have any legislative power so some government would have to pick up the group’s suggestions and move them forward.

The cost of new baseball stadiums has skyrocketed from $160 million in the early 1990s to more than $500 million today. That doesn’t include expenses outside the stadium such as parking lots, which easily can add $100 million to the cost.

Caucus chairman Chuck Sykes, who leads Tampa-based customer service company Sykes Enterprises, seemed most concerned that the region settles the Rays stadium debate soon.

The Rays contract with St. Petersburg says the team will stay at Tropicana Field through 2027, but that doesn’t mean the existing funding sources will still be there then.

 

"Don’t look at that lease and think we have time," Sykes said. "We really need to get going."

The caucus stayed away from suggesting that Hillsborough and Pinellas county create new taxes for local residents. But it did suggest continuing existing taxes and creating new taxes upon tourists.

Among its funding options are:

Immigrant investors. A novel type of stadium financing would rely on wealthy immigrants to pay for at least part of a new ballpark. Under the federal EB-5 Visa program, affluent immigrants seeking to move to the United States could invest $500,000 or
$1 million in a job-creating venture. Essentially, immigrants could buy their way into a visa.

The immigrant program is loosely tied to the Brooklyn Nets’ new arena in Brooklyn because a developer there raised more than $200 million from the EB-5 program to pay for infrastructure surrounding the Nets arena.

Tourist taxes. Currently, both Hillsborough and Pinellas counties charge tourists a 5 percent tax on hotel stays. Sykes’ group suggests raising it to 6 percent, which would bring in up to $60 million more in Pinellas County, up to
$45 million more in Hillsborough.

Sykes considers this option less feasible than some other funding options because the state Legislature would have to approve the bed tax increase.

 

Car rental surcharge. A new rental fee at Tampa’s airport could provide a windfall for a stadium, bringing in about $9.5 million a year. The community could issue bonds worth up to $150 million backed by that revenue stream, the caucus estimates.

Sykes argues Tampa’s car rental fees would be in line with other cities, such as Charlotte, N.C., and Austin, Texas, even with the new surcharge. However, such a charge also would require the Legislature’s approval and could face opposition from the local tourist industry.

"I would not support that at all because there’s already so many charges and surcharges on those rental cars," said D.T. Minich, executive director of Visit St. Pete Clearwater. "I don’t think that would be supported at all."

Special property taxes. In 2015, bonds for the Tampa Convention Center will be paid off, freeing up certain property taxes on downtown business, in a system called "tax increment financing." That could raise up to $115 million for a new stadium, the caucus found.

Other funding options include tapping into existing funding sources such as St. Petersburg’s share of a state half-cent sales tax and Hillsborough’s Community Investment Tax.

Making a new stadium work financially, though, relies on one thing: higher attendance, Sykes said. That isn’t a given, considering the relatively poor attendance jump that the Miami Marlins saw last year after opening a new $515 million ballpark.

Recently, the Marlins sold off some of their best players just a year after acquiring them, angering fans who felt betrayed.

"This is very dependent on people showing up for the game," Sykes said.

HOW TO RAISE $350 MILLION

The Baseball Stadium Financing Caucus suggests several funding sources for a new stadium, depending on where it lands. Among them:

Hillsborough County/Tampa

Community investment tax: up to $80 million

Downtown community redevelopment area: up to
$115 million

Car rental tax: up to $150 million

Sixth-cent tourist tax: up to $45 million

Pinellas County/St. Petersburg

Half-cent sales tax: up to $175 million

Sixth-cent tourist tax: up to $60 million

Fifth-cent tourist tax: up to $50 million

Penny for Pinellas tax: up to $40 million

State revenue sharing: up to $40 million

 Business leaders from both sides of the bay said either county could come up $350 million, much from existing taxes rather than new ones

Business leaders from both sides of the bay said either county could come up $350 million, much from existing taxes rather than new ones

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